Many people ask MBhealth about health savings accounts (HSA) and how they can use them to save money. The biggest benefit from a health savings account is the tax-free opportunity to pay for qualified medical expenses. Deductibles, copays, prescriptions, dental, vision, things of that nature can all be paid from a health savings account.
I talk to so many groups and individuals and ask them, “How did the HSA work for this year?” I hear, quite often, “Oh, I never set the account up.” I get disappointed because there’s money that they’re leaving on the table, that they’re not getting to put back in their pocket.
How a Health Savings Account Can Save You Money
I invariably hear from people who have not set up an HSA, “Well, I don’t have the money to put into my HSA account, I can’t fund it, I don’t know what my expenses are going to be and I have a monthly budget,” or things of that nature. How do I address that or what do I talk about in reference to that?
Well, I have a family of four and I don’t know what my month’s going to look like. I have two older boys, so I meet my deductible. I never have all the money for that in my HSA account. I may pay for things from a checking account so that money doesn’t come from an HSA and I’m not getting a tax benefit.
But at the end of the year when I do my taxes, I’ll look at how much came out pre-tax and how much I put into the account myself, and I’ll get that as a post-tax deduction up to the limits.
At the end of the year, I can look back; how many things did I pay for that I should have paid from the HSA account. If I can, I try to put that money in the account. Once it clears, I can reimburse myself that money because I know I used it for a qualified medical expense.
Learning to Use Your Health Savings Account for Maximum Savings
That sounds really complicated, it sounds like it’s a lot of work. It might be a little bit of work in the beginning, but not as much as some people feel like it is. Once you do it for a year, it becomes like any habit, it’s just second nature. Then you’re getting all that money back into your budget. You’re making it work more for you.
I work with people who have an HSA versus those who have a non-HSA group plan or individual plan. If you can save money with an HSA, it’s important that you’re speaking to people who know insurance like those of us here at MBhealth. You want to be sure that your HSA is set up properly and that you’re using it properly. Please give us a call here at MBhealth Insurance Agency at (314) 544-5400.
